Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/110827
Authors: 
Stimmelmayr, Michael
Year of Publication: 
2015
Series/Report no.: 
CESifo Working Paper 5311
Abstract: 
The paper provides a comprehensive assessment of the latest German corporate income and capital tax reform, which entails a major shift of the capital tax burden from the firm to the household level. Using a dynamic two-country computable general equilibrium model with integrated capital markets, we show that economic growth and domestic welfare are negatively affected by the reform. Key to the limited growth is the domestic investors' portfolio choice as a channel for tax avoidance at the household (i.e. investor) level. While international investors may well counteract the negative impact on growth, their privileged tax treatment erodes the domestic capital income tax base and thus creates adverse welfare effects.
Subjects: 
portfolio investment
corporate tax reform
foreign firm ownership
computable general equilibrium
JEL: 
H25
G11
F21
D58
Document Type: 
Working Paper

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